BAKU, Azerbaijan, September 22. Low-emission hydrogen use in refining sector is anticipated to surge as of 2023, Trend reports.
In a pivotal development, Sinopec's inauguration of the world's largest electrolysis plant in Kuqa, China, with a capacity of 260 MW, signals a substantial increase in low-emission hydrogen production for the refining industry.
This facility is set to generate 20 kilotons (kt) of low-emission hydrogen to meet the demands of the Tahe refinery. Nonetheless, the landscape remains relatively limited in terms of announced projects aimed at replacing hydrogen derived from unabated fossil fuels with low-emission alternatives within refineries.
Projections indicate that if all planned projects materialize on schedule, the refining sector could produce and utilize approximately 1.3 million metric tons (Mt) of low-emission hydrogen by 2030. This figure comprises roughly 1.1 Mt from fossil fuels with carbon capture, utilization, and storage (CCUS), and 0.2 Mt from electrolysis. This represents a 6% increase compared to potential production as of the Global Hydrogen Review 2022 release, primarily driven by CCUS-based projects.
Despite limited new announcements related to electrolysis-based hydrogen production, growth in this area has been somewhat offset by delays or halts in previously declared projects. Presently, the adoption of merchant hydrogen in refineries is gaining traction, offering an alternative avenue to bolster the supply of low-emission hydrogen. Some refinery operators have already entered agreements to utilize hydrogen produced from fossil fuels with CCUS, as exemplified by the partnership between Vertex Hydrogen and Essar Oil, serving the Stanlow refinery in the United Kingdom.
Analysis of ongoing and announced projects suggests the potential for an additional 0.7 Mt of low-emission hydrogen to be supplied to refineries by 2030. However, in the International Energy Agency's Net Zero Emissions by 2050 Scenario (NZE Scenario), more than 4 Mt of low-emission hydrogen are projected to be produced and integrated into refining processes by 2030. This figure comprises two-thirds from electrolysis and low-emission electricity, and one-third from fossil fuels with CCUS. Consequently, currently announced projects only account for approximately 25 percent of the NZE Scenario's requirements.
Notably, the shortfall is particularly pronounced for electrolysis-based projects, meeting less than 10 percent of the NZE needs, while fossil fuels with CCUS projects cover approximately three-quarters of the NZE requirements. Furthermore, the utilization of fossil fuels with CCUS in refineries enjoys a substantial head start, with existing projects already capable of fulfilling 15 percent of the onsite production needs outlined in the NZE Scenario.
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